Question

A company has a policy of paying salaries for contract labor on the 15th of the month following the labor services received. In December 2021, the company recorded $15,000 paid in salaries for labor services received in November 2021. In addition, labor services received in December 2021 were $12,000 and will be paid by the company on January 15, 2022. What adjusting entry will the company record on December 31, 2021? * I really need help with this*
Multiple Choice
a. Debit Salaries Expense and credit Salaries Payable for $3,000.
b. Debit Salaries Expense and credit Cash for $15,000.
c. Debit Salaries Expense and credit Salaries Payable for $12,000.
d. Debit Salaries Expense and credit Salaries Payable for $27,000.

Answer 1

Answer:

c. Debit Salaries Expense and credit Salaries Payable for $12,000.

Explanation:

The journal entry is shown below:

Salaries Expense          $12,000  

      Salaries Payable           $12,000

(Being salaries expense is recorded)

For recording this we debited the salaries expense as it increased the expense and credited the salary payable as it also increased the liabilities

According to the accrual basis of accounting, the expenses is recorded when they are incurred

So only $12,000 would be considered